Do you have the desire to explore new business opportunities in Singapore or obtain financing for a new venture?

It is essential to have the knowledge necessary to choose the most appropriate short-term business loan among the many different loan packages made accessible to small businesses.

When you need to borrow money, you should check out a number of different considerations and be aware of the various loan options that are accessible to you.

You will then be able to compare these various loans and choose the one that is most suitable for your business.

Continue reading this article to learn what factors to take into account while searching for a short-term loan for your business, the various possibilities that are open to you, the purposes that a business loan can serve, and the sources from which you can obtain such a loan.

What To Consider When Getting the Best Short-Term Business Loan?

Short-Term Business Loan in Singapore

What kinds of things do you need to take into consideration in order to secure a loan for your company?

Business Revenue

In Singapore, applications for business loans are evaluated according to the size of your firm, which indicates how much money you will produce over the course of the loan.

Because of this, you will be able to calculate the amount that you are able to borrow and then repay without having a detrimental effect on the finances of your company.

It’s possible that the quantity of money you can borrow is proportional to the number of workers you have. have.

Loan Tenure

When it comes to repaying the money you borrowed for your company, the quickest way to do so is to do so in the shortest amount of time feasible.

You will have financial savings as well as a reduction in the overall cost that you will incur. However, you should pick a period that will enable you to make payments without putting undue burden on the resources of your company.

Reason for the Loan

What are you hoping to accomplish by taking out a loan for your company in the first place? Would you like to invest in new machinery or inventory so that you can provide superior service to your customers? What exactly is it that you hope to achieve by using the money that will be given to you?

Amount of the Loan

The amount that you want to borrow should be the very last item you give any thought to. Be careful not to borrow more money for your company than is absolutely necessary for its continued operation.

Your company does not need to reach the following five levels in order to qualify for a loan; rather, it only needs to reach the next level.

Types of SME Loans

You need to have an understanding of the many different possibilities available on the financial market if you want to find the most beneficial loan for your company.

The following are some of the ways in which a loan can be received for a small business:

Line of Credit

This option can be used to settle both monthly payments as well as smaller, unplanned bills, making it a very versatile payment method.

To be eligible for this loan, it is not necessary for your company to have been running for many years in order to have good credit. In addition, the application for this sort of loan can be completed online, and the approval process only takes two business days.

Working Capital Loan

Working capital loans are an option for small and medium-sized businesses that want additional capital over a very short period of time. The maximum amount for an unsecured loan is $300,000, and the loan must be returned within five years.

Equity Financing

If a company does not meet the requirements for a bank loan because it does not have enough of a track record, the company may turn to equity financing as an alternative. In order to satisfy their requirements for capital, businesses often resort to selling ownership shares to outside investors.

Fixed Asset Loan

With this particular kind of loan, small and medium-sized enterprises have the opportunity to borrow up to $30 million for the purpose of making improvements to their equipment and machinery as well as automating their operations.

This loan can be used for the construction or acquisition of commercial or government structures, regardless of whether the property or equipment being purchased is new or used.

Short-Term Business Loan

As their name implies, the payback terms for short-term loans are also rather brief.

Depending on the terms of the loan, payments may be required to be made either once every day or once per week.

Because of the brevity of the loan’s repayment time, the interest rate for short-term business loans is typically greater. Additionally, the amount of money that can be borrowed is typically lower.

When compared to those for long-term loans, the requirements for this form of loan are far less stringent. However, before you take out a loan, you need to make certain that your company is able to manage the daily or weekly payments.

Discover more about the top considerations before getting an SME loan.

What Can Business Loans Be Used For?

Here are some reasons why Singaporeans take out a business loan:

In Order to Cover Start-up Expenses

You may be eligible for a short-term business loan regardless of whether your company is brand new or already up and running.

If you do not have the cash necessary, you may be able to cover the costs of starting a business with the assistance of a business startup loan.

It is possible that your application will not be granted within a day if you have a poor credit rating.

If you have a low credit score, it’s a good thing you can return the loan on a weekly or even daily basis.

In Case of an Emergency

Your company might require a business loan in Singapore in the event of an unexpected financial crisis.

If you want to receive a loan, you should check that you are able to pay back the amount that you borrow.

Considering Cash Flow

By securing a short-term loan, your company will be able to keep its cash flow stable.

If your company is able to turn a profit in a very short amount of time, you may qualify for a loan for a small business.

You should only consider getting a short-term loan if your company is in a position to pay back the loan on a daily basis.

In addition, a loan of this kind might not be a good idea if the borrower’s business has a large number of expenses, a small number of customers, and unpredictable earnings.

In Order to Acquire Inventory

Small business loans in Singapore are advantageous for a variety of reasons, including the fact that they make it easier for retail enterprises to buy merchandise.

If you have a need for inventory during the holiday season, a lender may be willing to provide you with additional time to repay the loan after the season has passed.

As a result, you will be able to turn a profit off of these loans by making low-priced purchases of stock that moves quickly.

To Start a New Project

When you discover the fresh potential for your company, you may decide to apply for a short-term loan in order to meet the associated costs.

If you take out a loan during the busy season, you can pay for temporary staff to recruit so that you can increase your sales.

But how do you compare SME loans?

Your initial step should be to select the appropriate financing for your company.

You need to determine if you require a short-term loan for a one-time purchase or whether you require more financing to acquire an expensive machine or a company unit before you can choose the type of loan that you need.

In addition, examine the different interest rates that are offered on business loans in Singapore, along with the fees that are associated with the loan and the length of the loan.

When looking for a good deal on a commercial loan in Singapore, it is in your best interest to shop around and examine the various terms and conditions offered by a variety of lenders.

When you compare several types of start-up loans, you can pick the one that has the lowest interest rate and costs, in addition to a reasonable payback time, which will save your company money.

Where To Get An SME Loan in Singapore?


The approval process for business loans is normally shorter when handled by licensed money lenders; nevertheless, Singapore banks also offer a revolving loan package.

In addition, financial institutions could demand that your company has been in operation for at least two to three years and that Singapore citizens or permanent residents hold at least 30%of the company’s shares.

If your company satisfies these requirements, OCBC will consider your application for a Small and Medium Enterprise loan.

The table that follows presents a summary of the interest rates that major banks charge for loans to businesses:

Bank Best fort Interest Rates
Citibank Unsecured business loan 6.25-15%
OCBC Bank Business revolving short term loan 8.88-13.88%
DBS Bank Business term loan 7-11%
Standard Chartered Bank Installment business loan 11%

Licensed Money Lenders

It’s possible that you won’t be able to satisfy the severe requirements that the bank has in place.

In addition, if you find yourself in a crisis and in need of a business loan in a hurry, there are moneylenders in Singapore who may assist you.

Because the Ministry of the Law oversees licensed money lenders, it is quite safe to borrow money from one of these lenders.

In this scenario, the loan will be granted to you depending on the parameters that have been established by them.

It is recommended that you meet at the lender’s physical address in order to sign the loan contract, for instance.

Find the Best Short Term Business Loan Today

When you own a company, you take on a lot of duties, and it’s possible that you won’t always have the financial resources to satisfy those obligations.

When something like this occurs, you have the option of obtaining a short-term SME loan in Singapore so that you can either expand your company or keep your cash flow stable.

Before applying for a loan for a small or medium-sized enterprise (SME) from a bank or licensed money lender, it is essential to do some window shopping and evaluate the various financing options.

Pick the loan that offers the best combination of cheap interest rates, low fees, and short term.

Published On: November 2nd, 2023

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